Nasdaq closes up on late surge

Techs turn around; push exchange above 1,500

NEW YORK (CBS.MW) -- The Nasdaq Composite, after sinking to an intraday low not seen since shortly after the terrorist attacks last September, fought Friday against a wide technology sell-off to close the week above the 1,500-point level.

The Nasdaq
$COMPQ
gained 0.5 percent, or 7.8 points, to close at 1,504.66. It was a major turnaround for the tech-heavy exchange, which fell as low as 1,445.44 in early trading -- its lowest point since dropping to 1,418.15 during trading on Sept. 27, 2001.

Bob Djurdjevic, an analyst with Asset Research in Scottsdale, Ariz., said the market swings of the past week have very little to do with the business outlooks coming from many tech companies.

"Bellwether stocks are being driven by irrational behavior," Djurdjevic said. "From a fundamental standpoint, we're seeing a lot of money being pulled out of equities and into treasurys."

Among the big-cap technology names, Cisco Systems
CSCO, -4.02%
lost 4 percent, or 59 cents share, to close at $14.30, Sun Microsystems
SUNW, -0.60%
rose 0.2 percent, or 1 cent a share, to close at $6.14, Intel
INTC, -1.79%
gained 0.8 percent, or 17 cents a share, and closed at $21.28, and Dell Computer
DELL
lost 1.3 percent, or 33 cents a share, to fall to $25.72.

Microsoft
MSFT, -1.70%
rallied, gaining nearly 2 percent, or $1.03, to close at $55.25 a day after it was revealed company Chairman Bill Gates has sold $400 million worth of company stock since early June. Oracle
ORCL, -1.42%
gained nearly 4 percent, or 31 cents a share, to close at $8.51.

Among non-Nasdaq tech companies, IBM
IBM, -1.26%
gained 1 percent, or 57 cents a share, to close at $76.17, Hewlett-Packard
HPQ, -1.74%
about 1 percent, or 15 cents a share, to fall to $17.35, Lucent Technologies
LU
shed another 2.5 percent, or 7 cents a share, and closed at $2.73, and EMC
EMC, -3.17%
lost 0.4 percent, or 3 cents a share, to fall to $6.96.

As was the case throughout the week, investors and analysts continued to show displeasure with the outlook for software companies. The Goldman Sachs Software Index
$GSO
fell 0.4 percent, or 0.41 points, and finished the week at 114.02.

Adobe gets waxed

On Friday, it was Adobe Systems' turn to be the sector's punching bag. Late Thursday, Adobe
ADBE, -2.35%
lowered its fiscal-year revenue forecast to between $1.2 billion and $1.25 billion from earlier estimates of $1.3 billion, while at the same time reporting second-quarter pro forma profits that beat Wall Street expectations.

USB Piper Jaffray responded to Adobe's announcement by downgrading the stock on Friday. By the end of the day, Adobe shares had lost 13.3 percent, or $4.82, to close at $31.37.

Not all analysts took a negative view of Adobe's report, however.

"We're seeing a weeding out of high expectations," said Gibboney Huske of Credit Suisse First Boston in New York. "The risk/return looks favorable to us as they have a new version of Photoshop that's doing well."

Business-software maker I2 Technologies
ITWO
was also one of the sector's big losers, dropping 17 percent, or 38 cents a share, to close at $1.84 -- the second straight day of double-digit losses. Sparking the sell-off were remarks by Chief Financial Officer Bill Beecher, who earlier in the week said the company was reviewing its entire business plan due to weak software sales.

I2's main competitor, Manugistics Group
MANU, -1.19%
which issued its own revenue warning last week, lost nearly 3 percent, or 15 cents a share, and closed at $5.50. SAP
SAP, -1.52%
lost 4 percent, or 99 cents a share, to close at $24.24 and Siebel Systems
SEBL
shed nearly 2 percent, or 26 cents a share, and finished the day at $14.86.

Chips tumble

Wireless communications chipmaker Qualcomm
QCOM, -1.95%
was slammed early and often Friday after Sprint PCS
PCS
one of Qualcomm's major customers, reported poor quarterly results. Qualcomm shares lost about 8 percent, or $2.49, to close at $29.91.

Chipmakers ended the day mixed, signaling that the sector hasn't completely recovered from Intel lowering its second-quarter sales figures last week.

Texas Instruments
TXN, -2.80%
lost 0.8 percent, or 17 cents a share, to close at $25.40, Motorola
MSI, -1.20%
lost 1.6 percent, or 26 cents a share, to finish at $15.60, Linear Technology
LLTC
rose 1.1 percent, or 36 cents a share, to close at $33.75 and Advanced Micro Devices
AMD, -2.30%
gained 2.2 percent, or 15 cents a share, and finished the week at $9.60.

Sanmina-SCI
SANM, -4.22%
lost 2.2 percent, or 18 cents a share, to close at $7.85. Credit Suisse First Boston downgraded the contract manufacturer on the grounds that the company is too exposed to the low-margin business of making personal computers.

CSFB also pointed to recent comments from Hewlett-Packard that it plans to squeeze lower prices from suppliers such as Sanmina as a reason for downgrading the stock.

The Goldman Sachs Hardware Index
$GHA
was down almost 1 percent, or 1.68 points, at 189.92.

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